Spire Healthcare Group plc

("Spire Healthcare", "the Company" or "the Group")

CAPITAL MARKETS EVENT

NEW AGREEMENT WITH BUPA

29 June 2022

Spire Healthcare Group plc (LSE: SPI), a leading UK independent hospital group, will today host a Capital Markets Event for investors, analysts and lending banks starting at 10:15am BST.

The Capital Markets Event will include a series of presentations by the Group's senior leadership team to set out how we plan to deliver our strategy to help meet the UK's healthcare needs. In addition, the event will detail our approach to Spire Healthcare's wider contribution to society.

In an evolving market, we have updated our Purpose and Strategy as follows:

·      Purpose - Making a positive difference to people's lives through outstanding personalised care.

·      Strategy - Help to meet UK Healthcare needs by running great hospitals and developing new services.

We aim through the presentations to provide an outline of the opportunities presented by the unprecedented demand for healthcare in the UK and, specifically, to:

·      Share our strategy and long-term financial objectives;

·      Provide deeper insights into what we do;

·      Highlight opportunities across our core business and adjacent markets; and

·      Set out our disciplined financial approach.

The presentations will set out the Group's strategy to:

·      Drive hospital performance by continuing to grow our existing hospital estate with increasing margins.

·      Build on quality by maintaining strong quality and safety credentials as a competitive advantage in all our activities.

·      Invest in our workforce by recruiting, retaining and developing a great workforce.

·      Champion sustainability, aiming to become recognised as an ESG leader in our industry.

·      Expand our proposition by selectively investing to attract patients and meet more of their healthcare needs.

·      Deliver strong financial performance through financial discipline supporting cash generation, targeted investment and improving ROCE / shareholder returns.

Spire's long-term financial objectives and financial framework

In line with the strategy to be presented at today's Capital Markets Event, the Group plans to drive accelerated organic growth, operational efficiency and margin progression over the medium term.

The Group's long-term financial objectives which will be set out today are as follows:

·      Hospital Growth: Outperform UK hospital market growth volume and ARPC; circa 5% CAGR (plus high inflation-related increases)

·      New Services: Greater than £50m of additional revenue - build, buy, partner

·      EBITDA ⁽¹⁾ Margin: Exceeding 21% supported by continuous cost savings programme, including a further £15m saving from 2023

·      ROCE ⁽²⁾: Exceeding 10% (in excess of Spire Healthcare's cost of capital)

Going forward, the Group will operate according to the following target financial framework:

·      Payor Mix: 70-80% private, dependent on NHS commissioning

·      Organic Capex ⁽³⁾: 6-7% of revenue, to fund continuous investment and upgrades

·      Cash Conversion ⁽⁴⁾: Circa 100%

Further, the Group will take a disciplined approach to M&A and other investments, assessed on a case-by-case basis.

Additionally, we set out the following in respect of the Group's capital allocation policy:

·      Sustainable dividend policy: 25-35% of Profit After Tax (subject to a bank covenant leverage ratio of less than 2.5 times); targeting return to dividend payment in 2023

·      Uses for excess capital: Complementary, disciplined M&A; excess cash used to pay down debt; fund Integrated Healthcare Network

Agreement with Bupa

The Group also announces today that it has signed a new four year agreement with Bupa, to provide services to its UK health insurance customers through to March 2026, with agreed pricing including inflationary mechanisms during this period. The new contract will build on the Group's excellent relationship with Bupa and will include progressive expansion of the existing network of cancer specialist centres offered to Bupa customers and the introduction of new pathways for musculoskeletal disorders.

Notes

1.     EBITDA is calculated as Operating Profit, adjusted to add back depreciation, and Adjusting items.

2.     ROCE is Adjusted EBIT divided by total assets less cash, capital investments and current liabilities.

3.     All site capex including expansion capex, IT, digitisation and projects.

4.     Cash conversion is cash from operating activities before tax and adjusting items divided by EBITDA.

5.     The latest Company-compiled view of analysts' expectations for FY22 and FY23 can be accessed through the following link: https://investors.spirehealthcare.com/investors/analyst-consensus/ .

Registration for the Capital Markets Event

To register your interest in the Capital Markets Event live webcast, please email spire@instinctif.com . The webcast will be available for replay following the event through the Company's investor website: https://investors.spirehealthcare.com/home/ along with a copy of the slides used.

This announcement contains inside information.

-Ends-

For further information please contact:

Registered Office and Head Office:

Spire Healthcare Group plc

3 Dorset Rise

London

EC4Y 8EN

Registered number: 09084066

About Spire Healthcare

Spire Healthcare is a leading independent hospital group in the United Kingdom, with 39 private hospitals and eight clinics across England, Wales and Scotland.

Working in partnership with around 8,150 experienced Consultants, Spire Healthcare delivered tailored, personalised care to almost 870,000 in-patients and daycase patients in 2021, and is the leading private provider, by volume, of knee and hip operations in the United Kingdom.

The Group's well-located and scalable hospitals have delivered successful and award-winning clinical outcomes, positioning the Group well with patients, Consultants, the NHS, GPs and Private Medical Insurance ("PMI") providers. 95% of Spire Healthcare's hospitals are rated 'Good' or 'Outstanding' by the CQC (or the equivalent in Scotland and Wales).

Spire Healthcare treats patients through a variety of routes including PMI, Self-pay and the NHS, providing the Group with diversified access to the expected growth opportunities in the UK healthcare market, which faces significant supply challenges as a result of NHS budget constraints and increasing demand from a growing population with longer life expectancy.